Casey Research Publication
Gold & Silver Daily
"World-wide physical off-take is ferocious...and this situation can't last without gold and silver prices being bid substantially higher."
 

¤ Yesterday In Gold & Silver

Gold was up a bit more than ten bucks by 9:00 a.m. Hong Kong time in their Monday morning trading session...and basically flat-lined until shortly after London opened for business.  Then, it fits and starts, the gold price worked its way slowly higher...even during the New York Access Market after Comex trading had ended for the day.

The gold price closed at $1,675.90 spot,  just off its high [$1,679.00 spot] of the day, which came at precisely 4:00 p.m. Eastern time.  Gold finished up $37.20 on extremely light volume...only 86,000 contracts...which is an occurrence I always like to see.

Silver rallied smartly until about 9:15 a.m. Hong Kong time, before getting sold off a bit going into the London open.  Then, like gold, away it went to the upside.  This happy state of affairs lasted until about 11:15 a.m. BST, which is about 6:15 a.m. Eastern time.  Then the silver price more or less traded sideways for the rest of the Monday session.  And, just like the gold price, silver's New York low came at the London p.m. gold fix, which was just a couple of minutes past 10:00 a.m. Eastern time...which is 3:00 p.m. in London.

The silver price closed at $32.04 spot...up 77 cents from Friday.  Net volume was also very light...around 22,000 contracts.

It appeared that the dollar had some influence on the gold price for part of the Monday trading day...although that theory sort of falls apart after 12 noon in New York.  From the Sunday night open at 6:00 p.m. Eastern, until shortly after noon in New York, the dollar dropped about 135 basis points, which is a pretty chunky move.  From that low, the dollar recovered about 20 basis points of that loss into the close of trading.

The gold stocks gapped up...and stayed up for the rest of the day...with the HUI closing virtually on its high of the day, up 3.47%.

The silver stocks did pretty well, too...with Nick Laird's Silver Sentiment Index up 3.03%.

(Click on image to enlarge)

Toronto was closed yesterday for Canadian Thanksgiving...and that's why there were no quotes available on any of the juniors on the Venture exchange.

The CME's Daily Delivery Report showed that 61 gold, along with 20 silver contracts, were posted for delivery tomorrow.  The link to the action, such as it was, is here.

There withdrawals from both GLD and SLV yesterday.  In GLD there was a smallish withdrawal of 48,658 troy ounces, along with a far more substantial withdrawal of 1,654,794 from SLV.  Whatever the reasons, it certainly didn't have anything to do with yesterday's price action in either metal.

And, for the first time this month, the U.S. Mint did not have a sales report.

There was both in and out movement at the Comex-approved depositories on Friday.  They reported receiving 595,086 ounces of silver...and shipped 581,847 ounces out the door, for virtually no change on the day.  The link to the action is here.

It was no surprise to me that silver analyst Ted Butler's weekly review to his clients was a rather long one considering the fact there were a lot of records shattered in both the Commitment of Traders Report and the Bank Participation Report.  Here's a free paragraph...

"Over the past month, directly attributed to the deliberate 30% price smash, the commercials have reduced their net short position by a stunning 25,000 contracts, the equivalent of 125 million ounces. This is in line with the 150 million oz total reduction I estimated recently when factoring in other markets (SLV, etc.). To achieve such an historic reduction in the total commercial net short position, the reciprocal speculative net long positions were also reduced to historically low levels. The net long position in the managed money component of the disaggregated report was at the lowest level since the CFTC has reported those figures. Amazingly, the net long position of the non-reporting traders was the lowest it has been in my 30 years of studying the COTs. Clearly, the leveraged long speculators, both large and small, served as the cannon fodder for the commercials’ collusive and successful activities. While it's always possible for there to be additional liquidation amid further manipulation to the downside, it's important to remember that you can’t get blood from a stone. Given the extremely low level of speculative long positions remaining, it is hard for me to imagine further bloodletting."

I have three days worth of stories for you today.  It all adds up to lots to read, lots to listen to...and lots to watch.  I hope you have the time...and I'll leave the final edit up to you.

 

¤ Critical Reads

Clamping Down on Rapid Trades in Stock Market

Regulators in the United States and overseas are cracking down on computerized high-speed trading that crowds today’s stock exchanges, worried that as it spreads around the globe it is making market swings worse.

The cost of these high-frequency traders, critics say, is the confidence of ordinary investors in the markets, and ultimately their belief in the fairness of the financial system.

“There is something unholy about them,” said Guy P. Wyser-Pratte, a prominent longtime Wall Street trader and investor. “That is what caused this tremendous volatility. They make a fortune whereas the public gets so whipsawed by this trading.”

And that's only part of it.  HFT is also part of market rigging operations when it suits the powers that be.  This story was in the Saturday edition of The New York Times...and I thank reader Phil Barlett for sending it along.  The link is here.

Read more...

We are looking at a total global financial collapse - Gerald Celente

“It’s like Bernie Madoff said, ‘The US is one big Ponzi scheme.’  From the King of Ponzi he knows what he’s talking about.  All they can say in the mainstream media is that it’s a buying opportunity as they sucker people back into these markets.  Did you ever here them say, ‘It’s a selling opportunity?’  Not one of them, they’re a bunch of whores.”

I think I've used that word the odd time myself in this column.  This King World News blog was sent to me by Australian reader Wesley Legrand...and the link is here.

Read more...

France, Belgium and Luxembourg agree on Dexia deal

If you weren't reading the European news websites on the weekend, you would never have known that a European bank went under on the weekend...got cut up and sold off as scrap before the markets opened in the Far East on Sunday night in North America.

France, Belgium and Luxembourg said on Sunday that they had reached a deal to dismantle troubled bank Dexia, the first victim of the eurozone debt crisis.

In a joint statement, the three countries said, "The proposed solution, which is the result of intensive consultations between all involved parties, will be submitted to the Dexia board, whose responsibility it is to approve the plan."

French and Belgian prime ministers, Francois Fillon and Yves Leterme, held a lunch-time meeting to finalise the deal to dismantle the bank, which also had to be rescued in 2008 at the start of the global financial crisis.

And believe it or not, dear reader, this bank passed the European bank 'stress test' back in the spring. This is your first must read of the day...and I thank Roy Stephens for digging it up for us.  The link is here.

Read more...

The Financial Crisis Returns: Europe's Attention Shifts to Its Ailing Banks

Sovereign bonds were once considered among the safest of all investments. Yet with Greece teetering and several more euro-zone countries on the watch list, the Continent's banks are in trouble. The European Union is struggling to come up with an antidote.

The mood was decidedly somber last Thursday as Jean-Claude Trichet put in his last appearance as the president of the European Central Bank (ECB) following a meeting of the institution's governing council. There was no farewell gift and no bouquet of flowers -- only a few words of praise from Jens Weidmann, the president of Germany's central bank, the Bundesbank.

Three years after the collapse of the Lehman Brothers investment bank in September 2008, the crisis is heading toward a new peak. The banks no longer trust each other and, during the past week, prices of insurance policies to protect investors in the event that credit institutions go bankrupt have soared to the highest levels ever observed. Only the central banks are considered safe havens and are flooded with money from financial institutions.

This second offering from Roy Stephens showed up at the German website spiegel.de yesterday...and is well worth your time, if you have it.  The link is here.

Read more...

Banks parking more cash with European Central Bank

This AP story showed up over at news.yahoo.com yesterday.  The yahoo.com story was pulled...and it now appears on the Internet with the far-less-threatening new headline "ECB slows down government bond buying further".

The meat of this story is in the last three paragraphs...and you can pretty much ignore everything that comes before that.  This version of the story shows up posted over at the ctpost.com website...and I thank reader Craig Eubanks for bringing it to my attention.  The link is here.

Read more...

Slovaks Love and Hate Euro; Bailout May Lie in Between

The prospect of guaranteeing the debt of richer but more spendthrift countries like Greece, Portugal and even Italy has led to public outrage. So much so that tiny Slovakia now threatens to derail a collective European bailout fund to shore up the euro, which requires the approval of all 17 countries that use the currency.

Once among the most enthusiastic new members of the European Union, and an early adopter of the euro in Eastern Europe, Slovakia is proud of its strong growth and eager to leave behind its reputation as the “other half” of Czechoslovakia. But it has also become a stark example of the love-hate relationship that many residents of the Continent have begun to feel toward a united Europe.

This most excellent story appeared in the Friday edition of The New York Times...and I devoured it the moment I discovered this Roy Stephens offering in my in-box.  It's time to bone up on Slovakia, because you're going to hear a lot more about this country in the coming days...and the link is here.

Read more...

Walker's World: The real euro crisis

Even if Europe's banks are fixed and even if Greece is bailed out and the markets are intimidated by a great wall of euros into backing away from speculation against Italy, Spain and France, the euro crisis won't go away.

No financial engineering can be more than a short-term fix. No new European treaty, however clear and rigid its rules over sovereign debts and budget deficits, can address the underlying problem.

Until Greeks and Spaniards and Italians start working as well as Germans, the problem is going to return. It is as simple as that.

This fourth Roy Stephens offering is well worth the read, as UPI Editor Emeritus Martin Walker has hit the nail on the head with story posted from Stuttgart yesterday.  The link is here.

Read more...

Quantitative easing, or when there's nowhere left to run: Alasdair Macleod

Writing at the GoldMoney.com website, economist and former banker Alasdair Macleod, who spoke at GATA's Gold Rush 2011 conference in London in August, reflects today on the "quantitative easing" that constitutes the rescue of Europe's insolvent banks and will do the same in the United Kingdom and United States. Macleod writes:

"The idea that QE is primarily to help the economy recover is Keynesian guff, a cover for the true reason. Without it, the U.S. and U.K. would have to compete for global savings at far higher interest rates. What price $2 trillion in new Treasuries with no QE? What price L175 billion in new gilts? The debt trap has already sprung. And few investors yet seem aware of the irony that loading up banks with Treasuries and gilts is exactly what the eurozone banks have already done for the PIIGS. Whatever the current difficulties faced by European banks and the U.S. and U.K. governments and their banking systems, there is only one option for all of them: Buy time by printing yet more money. This is why the banking system in the eurozone and elsewhere will survive. Banks need governments as much as governments need them. The cost of this survival will be borne by the unwitting saver, who has been frightened into cash only to find it being debased more rapidly than before."

I stole all of the above from a GATA release on Sunday...and the link to the article at the goldmoney.com website is here.

Read more...

Dr. Dave Janda, WAAM 1600, interviews your humble scribe

As I mentioned in my Saturday column, I would be doing this interview on Sunday...and that I would be posting it in today's column...and here it is.  And if you really don't want to listen to it...and I'll certainly understand if you feel that way...then you should at least listen to the Steve Jobs quote that the good doctor reads at the very beginning of our interview.  It's a real smack across the side of the head for each and every one of us.  The other thing you should listen to is the comment from the IMF official on the high possibility of an imminent melt-down of the world's financial system.

The interview itself runs about 25 minutes...and the link to the mp3 file is here.  It takes a while to load on some older computers, as it's a pretty big file.

Read more...

Silver eagle bullion sales move into record territory

Mike Zielinski reports at Coin Update that demand for U.S. Silver Eagle coins this year has already surpassed last year's demand with three months still to go this year. Zielinski's commentary is headlined "Silver Eagle Bullion Sales Move into Record Territory" and you can find it posted at the coinupdate.com website.  I stole all of this from a GATA release on Saturday..and the link is here.

Read more...

Gold rush in India has now become a sprint

Here's a story that appeared in a posting over at rediff.com on September 26th...and it's filed from Mumbai.

According to a JPMorgan report, India is home to more than 18,000 tonnes of gold (about 11 per cent of the global stock), worth about $1.1 trillion (versus an equity market cap of $1.2 trillion). Gold holdings are also more evenly distributed across Indian households as compared to stocks.

"The Indian retail investor, through thick and thin, has invested a substantial quantity in the best performing asset class in the last two-three years, which is gold. Indians always have this fascination for gold and rightly so.

It has done well for them," says Bharat Iyer, head of India equity research at JPMorgan.

That's the India branch of JPMorgan saying all these wonderful things about gold...not their counterparts in North America.  It's a bit of a read, but we hardly get much gold-related material of substance from that part of the world, so it's well worth the read.  I thank reader 'David in California' for sharing it with us...and the link is here.

Read more...

Dutch government comes half clean on gold reserves

Here's a GATA release from Saturday that's a must read.  It contains a considerable preamble by Chris Powell, along with the link itself.  So rather than have me re-invent the wheel...I'll just leave it up to Chris...and the link is here.

Read more...

Germany should end the secrecy and bring its gold home: Lars Schall

Here's another GATA release.  Chris Powell spent many hours copy/editing Schall's new essay, as English is not his first language.

This is a fairly long read...and I was much surprised when I got to the end, that he had dug up an old essay of mine from way back when.  That, and Dana Allen's related essay he mentions below mine, are very much worth your time as well.

The link to 'all of the above' is here.

Read more...

History Channel's 'Decoded' program on Fort Knox is posted at YouTube

Unbeknownst to me, the Fort Knox episode of "Brad Meltzer's 'Decoded'", was not available outside of Canada and the USA.  That has now changed.  It can now be found posted in three installments over at youtube.com...and here are the links to Part I, Part 2...and Part 3.

Read more...

Global bank crisis will push gold over $2,000: Robin Griffiths

When asked about gold, Griffiths replied, “Nothing has gone wrong with the gold story.  When gold fell to $1,550, the Financial Times, true to form, came out with an article about why it was a bubble and how the bubble had burst.  Of course from that day on gold has never stopped rallying again.  The likely bounce takes us through $2,000 before the end of this year, that’s a very reasonable forecast.

This King World News blog is well worth the read...and the link is here.

Read more...

Our gold and silver business has never been better

Here's David Schectman's daily blog that's posted over at the milesfranklin.com website.  David is in the precious metals business...and has his finger directly on the pulse of retail gold and silver sales.  Business is booming...and that's what's happening at every bullion store on planet earth.

The JPMorgan-sponsored 30% off sale in silver has set of a buying spree like none other...and I can confirm what he says, because the same thing is happening at my bullion dealer's place here in Edmonton.

This is a must read from start to finish...and I thank reader 'David in California' for bringing it to my attention...and now to yours.  The link is here.

Read more...

King World News posts Davies audio and precious metals demand reports

The full audio of the latest KWN interview with Hinde Capital CEO Ben Davies has him talking about the gargantuan money printing that will be necessary to "recapitalize" the zombie banks of Europe and advising buying the dips in gold and silver. The audio is 19 minutes long and you can find it linked here.

Meanwhile, King World News conveys reports from a couple of major Australian coin and bullion dealers about unprecedented retail demand for the precious metals...and the link to that blog is here.

Read more...

Peak Silver Revisited: Impacts of a global depression, declining ore grades & a falling EROI

Here's an incredibly interesting article that was sent to me by Edmonton reader B.E.O. on Sunday.  The author talks about peak oil and the impact on silver mining throughout the world.  Of course, as he mentions at the end, his comments apply to all commodities regardless of whether they are above or below ground.

Most of the peak oil information in this essay I've read either at the oildrum.com website, or in Matt Simmons book "Twilight in the Desert: The Coming Oil Shock and the World Economy".

This is a longish must read, with lots of charts and graphs...and it's posted over at the silvergoldsilver.com website.  The link is here.

Read more...

 

¤ The Funnies

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¤ The Wrap

There are no markets anymore, only interventions. - Chris Powell, GATA

Yesterday was a good day in the precious metals market...and the preliminary open interest numbers for Monday indicate that yesterday's rally in both gold and silver may have had a short covering element to them, but I'll reserve final judgment until this Friday's Commitment of Traders report.

The final open interest numbers for Friday showed a smallish increase in gold's open interest...and silver's o.i. was virtually unchanged.

Today [at the close of Comex trading] is the cut-off for the next COT report...and even though it won't show the dramatic changes that we saw in the last two reports, I'm still interested in what it will show.  I'm keenly interested in what the 31 small Commercial traders [Ted Butler's raptors] are going to do with the 20,000+ long positions that they are going to sell as the next rally progresses.

Of course I'd be delighted if it was the big Commercial shorts that were on the buying end...covering their short positions, or buying the long positions that the raptors are selling.  This process won't happen overnight...and will take place over a period of a few weeks or more.  I will be looking for these signs right along with Ted...and we might see signs of it in this Friday's report.  Or not.

Both gold and silver made rally attempts in Far East trading earlier this morning...but all attempts, no matter how small, got sold off.  Now that London has been open for a couple of hours, both metals are under heavy selling pressure...and a lot of yesterday's gains, particularly in silver, have disappeared as of 5:14 a.m. Eastern time.  Volumes are already very heavy.

In the very short term, I have no idea what silver and gold prices will do...but the longer term should not be in doubt in anyone's mind. World-wide physical off-take is ferocious...and this situation can't last without gold and silver prices being bid substantially higher. It's only the timing that is the big unknown.

I look forward to this morning's Comex open with great interest.

See you on Wednesday.